Difference between fixed and current assets

Difference between durable and consumer goods

• When creating the accounting and the annual financial statements based on it, there is the difference between fixed and current assets.
• Basically, the differentiation is quite simple. Fixed assets include items that are in repeated use. Office equipment, for example, falls under fixed assets.
• Current assets are the assets of a company that "leave" the company again. A classic example of this is cash.
• Current assets also include raw materials from which goods are produced that are then sold.
• The difference between fixed and current assets is also reflected in the valuation in the annual financial statements. The purchase price for fixed assets is not one-off in the year of purchase on the expenditure side booked, but over several years, according to the official depreciation plan of the Federal Ministry of Finance, written off.
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How do fixed and current assets differ? - Basic knowledge for start-ups

Especially when it comes to the question of how fixed and current assets differ, they break ...

• This means that the purchase price is divided by the specified number of years of use and is accordingly recorded as an expense each year.

The object can be fixed and current assets

• The difference between fixed and current assets can also be made clear in the case of a single item.
• A car is a fixed asset at a car dealer as long as it is a demonstration vehicle. However, the moment the vehicle is released for sale, it is part of the current assets.
• The difference between fixed and current assets can be summarized as follows: What in the company remains are fixed assets that sooner or later leave the company in the course of business operations Current assets.